Robert Tchenguiz v Serious Fraud Office & Ors (Nov 2014)
The judge below had been entitled to make an order for costs on the indemnity basis following the claimant's unsuccessful application under the CPR r.31.22; among other things, the fact that the claimant was seeking the relevant documents for extraneous purposes took the case outside the norm. However, there should be no general principle that indemnity costs would be awarded against the applicant in relation to an unsuccessful application under r.31.22.
The appellant (T) appealed against an order requiring him to pay the costs incurred by the respondent, the Serious Fraud Office (SFO), in opposing an application of his on the indemnity basis.
T had brought the instant action against the SFO after being the subject of a criminal investigation which resulted in no charges being brought. He sought to recover losses arising from unlawful search warrants issued by the SFO. Unrelated proceedings had been commenced in Guernsey. The parties to those proceedings included certain entities in which T had an interest as beneficiary, and the issues concerned certain inter-company loans between those entities. The SFO had disclosed documents to T in the instant action which it had previously obtained from third parties as part of its original criminal investigation as well as other documents created by the SFO containing information from third parties and references relating thereto. T sought permission under the CPR r.31.22 for, among other things, his Guernsey lawyers to seek to have those documents admitted in evidence in the Guernsey action. The judge refused the application, holding, among other things, that the documents contained information relating to a criminal investigation carried out by the SFO and that there was a very strong public interest against permitting the use of such documents for collateral purposes. The judge ordered T to pay the SFO's costs on the indemnity basis. He concluded that the fact that the application had been made solely for T's benefit in relation to extraneous proceedings took the application "out of the ordinary run of things". He also stated that the general approach ought to be that applications under r.31.22 should result in the other party being entitled to a full indemnity in respect of his costs.
There should be no general principle applicable to all applications under r.31.22 to the effect that indemnity costs would be awarded against the applicant. There were many different kinds of such applications, and the general rules as to costs ought to be applicable to them, as much as they were to any other application before the courts. Insofar as the judge adumbrated such a special general principle, he was wrong. However, he had ample grounds for awarding indemnity costs in the circumstances of the case. T's application was indeed one that was extraneous to the extant proceedings. It required a huge amount of effort from the SFO in terms of liaison, checking and legal consideration. The SFO had been fully entitled to resist the application, as it did successfully in the public interest. Those factors took the case outside the norm (see paras 7-8 of judgment).
View all cases
13 Nov 2014
Court of Appeal
Jackson LJ, Sharp LJ, Vos LJ
LTL 13/11/2014 :  EWCA Civ 1471
Catherine Newman QC